Without a doubt, property is perhaps the last aspect where tech-savvy entrepreneurs will worry themselves. Even though it may be less likely that procuring an office building could be done by means of an app, but last year in the US, more than $1 billion was invested in more than "100 commercial real estate start-ups using elements of crowdfunding," according to a news article on Financial Times.
In a news report on Greatest Boom Ever, BrickVest, a London-based start-up, had a slightly different focus from its peers. With its strong German ties, BrickVest attempted to embrace certain principles of crowdfunding in its business model. Crowdfunding, in essence, borrows social media notions in order to enable small businesses or entrepreneurs in securing funding from a number of individual lenders.
Emmanuel Lumineau, BrickVest chief executive, said: "Our industry has never been customer centric." As cited form an article on Financial Times, Lumineau was criticized even by his former colleagues at Goldman Sachs for opting to "eat potatoes and carrots at a start-up" instead of "milking the system at a private equity fund".
"We started low to get people to try it out," Lumineau said. The "it" which is being tested refers to a platform in which investors may allocate funds to real estate investment strategies. He used such a term instead of buildings, although the fundamental asset is typically a single building, because, as he said: "a strategy is the underlying asset, the business plan, the capital structure and who is going to execute it".
As cited form an article on Financial Times, the minimum investment of BrickVest is set at €1,000. This low hurdle is aimed at persuading investors to start diping their toes in the water.
BrickVest's goal is not only to spawn crowdfunding for property, but also it aims to make real estate easily accessible even to very sophisticated investors who would rather want to build their own portfolios.
